One early morning in January 2018, Coincheck noticed some suspicious activity on its crypto exchange service. Before their admin could isolate the incident, they had already lost a whopping $530 million to hackers. Hackers are working round the clock to fleece companies and investors. You have no choice but to up your game as well.
So, here are 4 ways to securely use your crypto exchange:
1. Secure your wallet
The first step in ensuring your cryptocurrencies are safe is to use a secure wallet. Every wallet has some basic security features but you need to beef up the security in order to keep hackers at bay. On a bare minimum, you should have a passphrase, a pin code, and a two-factor authentication. Before settling on a wallet, find out if it will give you access to your private keys. Support for a backup and restore feature is also important. As a rule of thumb, go for a wallet that has a vibrant development community.
2. Use a cold wallet
A cold wallet has two main advantages. Firstly, you can operate it without an internet connection. Secondly, you can store the cold wallet on a different computer. This secures your cryptocurrencies from hackers who primarily rely on the internet to perform their hacks. Cold wallets also make it easier to trade securely with an exchange you do not trust. The biggest security threat to cold wallets is losing the computer on which they are installed. You should therefore only use this method if you have taken precaution to secure the host computer.
3. Online security best practices
There are some basic security measures that you should observe every time you go online. These include using an updated antivirus and anti-malware software, double-checking the website URL before accessing the wallets, using secure browser extensions to dodge any phishing attack, only using trusted wallets and never installing unverified software.
4. Backup your private keys
Cryptocurrencies are designed to give people full control of their money. So it might be counterproductive to think of backing up on the cloud or some other third party service because that would mean your currencies are only safe as long as their service is safe. It is, therefore, a good idea to have a physical backup of all your primary keys at a private location you trust. You can even store your mnemonic passphrase and mnemonic phrase at different locations to make it even more secure.
The cryptocurrency universe is expanding exponentially and with this unprecedented growth comes inherent risks. Most newbies are only concerned with the commissions and traded instruments. However, it is vitally important to also consider the security of the crypto exchange. Start by following the steps suggested above and you will enjoy using your crypto exchange securely.